The Power Line 100: John H. Cochrane

John H. Cochrane of the University of Chicago’s Booth School of Business is high on the Power Line Best Professors in America list, but his article on the interest rate risk to our economy in today’s Wall Street Journal, “Treasury Needs a Better Long Game,” makes it timely to notice him this morning.

John H. Cochrane

Cochrane is the AQR Capital Management Distinguished Service Professor of Finance at the Booth School. But if that is a mouthful you can just repair to the fact that he’s an adjunct scholar of the Cato Institute, which is always good enough for me. From his longer title you might guess that he’s an expert on asset pricing, and you’d be right! His best-known book is titled Asset Pricing. He also runs a blog with the splendid name The Grumpy Economist, though he doesn’t seem the slightest bit grumpy in real life. Here’s his personal website, which has lots more.

There’s no doubt Cochrane could induce eye-glazing with deep-dish explorations of the Modigliani-Miller theorem, but on the other hand he can deliver thoroughly accessible smackdowns like this blog entry (“Two Cents on the Minimum Wage”):

“Once upon a time, the minimum wage, like free trade, was a basic test of whether you were awake in the first week of econ 1. We put a horizontal line in a supply and demand graph. Minimum wages increase unemployment of poor people. . . The fiddling while Rome burns is worse here than the belief in minor economic magic.”

For an example of his classroom style, the video below picks up right in the middle of a lecture Prof. Cochrane gave in Portugal, where he references the risky monetary practices of “Helicopter Ben” Bernanke: